SETTING THE SCENE ON CLIMATE INTEGRATION FOR PE AND VC

Susanne Gløersen, SustainableInsightFounder & Sustainability Strategist

ABOUT MYSELF

• 8y+ experience from sustainable investments• Sustainability strategist (Formuesforvaltning),

ESG-analyst (Nordea), Carnegie• Wealth Management Trainee Program (Nordea)• Co-founder of Norsif• Mentor Katapult Ocean start-ups

• WHAT: Support the acceleration of pioneering and best practise sustainability approaches andinvestments for fund managers, investors and companies.

• .

• WHO: Particular focus on venture capital and private equity

SustainableInsight (founder)

ABOUT MYSELF

• Strategy for sustainability and PE/VC

• Integration of sustainability in due dil, active ownership and reporting

• Extensive insight in best practise in the industry

• VC - Sustainability Framework

EXTENSIVE WORK WITH AND FOCUS ON PE/VC

• «Redefining green tech investments», StartUpExtreme

• LØRN TECH podcast on green tech• «Bill Gates has a point», chronicle

E24• «Oslo Scale Up Day - Rethinking

green investments»

• «Green and equitable private equity», chronicle Finansavisen

• PE and sustainability seminars• Roundtable on climate risks and

investment opportunities (NVCA collaboration)

• Invited to Minister of Finance for dialogue meeting on private equity

ESTABLISHING STRATEGY, FRAMEWORKS AND INDUSTRY BEST PRACTISE

SHARING INSIGHT IN SUSTAINABILITY AND PE

SHARING INSIGHT IN GREEN TECH AND VC

BIG PASSION FOR:Green technology

Value creation from sustainabilityMobilizing capial for green tech

Cutting-edge best practise

CLIMATE IS TOP OF AGENDA

FOR PE FUND MANAGERS AND INVESTORS

77% are concerned about carbon footprint reporting

83% of the PE fund managers and investors in PwCs study are

concerned about climate risks in their portfolios

Source: PwC PE Responsible Investment Survey 2019

BUT ACTION IS MOVING TO SLOW!

BIG GAP BETWEEN

CONCERNS AND ACTION

• 58% concerned for climate risk for PE firms, 20% take action

• 83% concerned for climate risk for portfolio companies, 31% take action

• 77% concerned for carbon footprinting of portfolios, 28% take action

Source: PwC PE Responsible Investment Survey 2019

WHY?

INVESTORS DEMAND MORE REPORTING AND TRANSPARENCY

80% of companies surveyed by ERM

faced increased pressure from investors to

report climate-related risk and management

Source: ERM «Climate change risk – the new investment

fundamental» (2018)

STILL, ONLY A MINORITY OF PE FUNDS MEASURE AND REPORT CO2 EMISSIONS OF INVESTMENTS

ARGENTUMS ESG FUND MANAGER SURVEY: .

8.6% of the total underlying portfolio reported CO2-emission data (63 companies)

“The report shows that few of the underlying companies have data for this”

”Argentum will continue to request this data from the managers in order to form a better picture of CO2 emissions in the underlying

portfolio”.

Source: Argentums ESG Report 2018

IT IS VITAL THAT WE STEP UP AND ACT

SO, WHAT SHOULD BE DONE?

NOT ONLY PE – VC AS WELL!

PRIVATE EQUITY VENTURE CAPITAL• INTEGRATE IN INVESTMENT STRATEGY • INTEGRATE IN INVESTMENT STRATEGY

• INTEGRATE IN DUE DILIGENCE• IDENTIFY AND MANAGE CLIMATE RISK• RESILIENCE STRATEGY FOR REPOSITIONING OF

COMPANIES

• INTEGRATE IN DUE DILIGENCE

• INVESTMENT OPPORTUNITIES• VALUE CREATION FROM SUSTAINABILITY

• INVESTMENT OPPORTUNITIES• VALUE CREATION FROM SUSTAINABILITY

• PLAN AND TARGETS FOR CO2-EMISSION REDUCTION (DECARBONIZATION)

• CLIMATE AWARENESS AND EMISSION AVOIDANCE

• MEASURE & REPORT CO2-EMISSIONS (SCOPE 1,2,3)

• MEASURE & REPORT POSITIVE IMPACT OF GREEN BUSINESS

• MEASURE & REPORT CO2-EMISSIONS (SCOPE 1,2,3)??

• MEASURE & REPORT POSITIVE IMPACT OF GREEN BUSINESS (TECH & PRODUCTS)

REDUCE RISK/STRENGTHEN COMPANY

SEIZE OPPORTUNITIES

REDUCE CLIMATE IMPACT

MEASURE AND REPORT

POSITIONING

CLIMATE INTEGRATION IS RELEVANT FOR VC

WHAT FRAMEWORKS AND GUIDELINES ARE AVAILABLE?

IIGCC, PRI «A GUIDE ON CLIMATE CHANGE FOR PRIVATE EQUITY INVESTORS (MAY, 2016)

.

Recommendations for both LPs and GPs

WHAT FRAMEWORKS AND GUIDELINES ARE AVAILABLE?

.LEADING PIONEERS ARE STEPPING UP INDUSTRY`S EFFORTS

.

Initiative Climat International

QUESTIONS WE SEEK ANSWERS TO

– TO ACCELERATE THE INDUSTRYS CLIMATE INTEGRATION

THE «ACHIEVING» PART OF CLIMATE INTEGRATION

• What is status of the industry`s climate integration efforts?

• Where are practises lagging the most?

• What is best practise?

• What are some of the challenges GPs are facing?

• Current and expected demands from LPs – and should they do more?

REPORTING OF CLIMATE IMPACT AND CO2-EMISSIONS

• Strive for CO2- emission portfolio coverage independant of sector/size?

• Quantitative vs qualitative reporting?

• Scope 3 - should the industry strive to measure scope 3?

• How to best measure positive climate impact of green business?

• What is the value of measuring/reporting CO2-emissions for GPs and LPs?

• What tools are available?

• PE vs VC pespective

REPORTING VS ACHIEVING

SUSTAINABLEINSIGHT, SUSANNE GLØERSEN.Contact: sustainableinsight@susannegloersen.comLinkedIn: SusanneGloersenTwitter: SusanneOslo

Blog: sustainableopportunityinitiative.com